Correlation Between Keros Therapeutics and Viridian Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Keros Therapeutics and Viridian Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Keros Therapeutics and Viridian Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keros Therapeutics and Viridian Therapeutics, you can compare the effects of market volatilities on Keros Therapeutics and Viridian Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Keros Therapeutics with a short position of Viridian Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keros Therapeutics and Viridian Therapeutics.

Diversification Opportunities for Keros Therapeutics and Viridian Therapeutics

KerosViridianDiversified AwayKerosViridianDiversified Away100%
0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Keros and Viridian is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Keros Therapeutics and Viridian Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viridian Therapeutics and Keros Therapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Keros Therapeutics are associated (or correlated) with Viridian Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viridian Therapeutics has no effect on the direction of Keros Therapeutics i.e., Keros Therapeutics and Viridian Therapeutics go up and down completely randomly.

Pair Corralation between Keros Therapeutics and Viridian Therapeutics

Given the investment horizon of 90 days Keros Therapeutics is expected to generate 0.97 times more return on investment than Viridian Therapeutics. However, Keros Therapeutics is 1.04 times less risky than Viridian Therapeutics. It trades about -0.06 of its potential returns per unit of risk. Viridian Therapeutics is currently generating about -0.42 per unit of risk. If you would invest  1,137  in Keros Therapeutics on November 30, 2024 and sell it today you would lose (43.00) from holding Keros Therapeutics or give up 3.78% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Keros Therapeutics  vs.  Viridian Therapeutics

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -80-60-40-2002040
JavaScript chart by amCharts 3.21.15KROS VRDN
       Timeline  
Keros Therapeutics 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Keros Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb10203040506070
Viridian Therapeutics 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Viridian Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1617181920212223

Keros Therapeutics and Viridian Therapeutics Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-16.89-12.65-8.41-4.17-0.07073.547.210.8714.5318.19 0.0050.0100.0150.0200.025
JavaScript chart by amCharts 3.21.15KROS VRDN
       Returns  

Pair Trading with Keros Therapeutics and Viridian Therapeutics

The main advantage of trading using opposite Keros Therapeutics and Viridian Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keros Therapeutics position performs unexpectedly, Viridian Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Viridian Therapeutics will offset losses from the drop in Viridian Therapeutics' long position.
The idea behind Keros Therapeutics and Viridian Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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